Liu, H. H., and Chiu, Y. Y. 2012. Bonus Pack, Upgrading or Price Discount? The Impact of Promotional Framing on Consumers’ Cost Assignments and Relative Preference. NTU Management Review, 23 (1): 269-296. https://doi.org/10.6226/NTURM2012.MAR.R10048
Hsin-Hsien Liu, Associate Professor, Department of Asia-Pacific Industrial and Business Management, National University of Kaohsiung
Yu-Yeh Chiu, Assistant Professor, Department of Marketing and Distribution Management, Chien Hsin University of Science and Technology
Abstract
In accordance with prior research into mental accounting and promotional framing, the authors suggest that consumers confronted with price promotions are more likely to integrate the discount into their purchasing costs and consider it a reduced loss. In contrast, consumers offered a bonus pack or an upgrade should separate the promotions into accounts other than purchasing costs and consider them extra gains. The bonus pack and upgrading promotions thus should be more salient and attractive than the price discount promotion. Three experiments examined these propositions: Experiments 1 and 2 showed that participants preferred bonus pack to price discount promotions, mainly because they differently assigned the discounts to specific mental accounts across two promotional frames. Moreover, the results excluded an alternative explanation related to the silver lining principle. Experiment 3 confirmed that upgrading promotion was more attractive than price discount promotion. This study thus offers key theoretical and practical implications.
Keywords
promotional framing mental accounting bonus pack